Reports of China curtailing its purchases of U.S. Treasuries triggered a sell-off in bond and stock futures overnight, which in turn sent the market gapping down slightly this morning. In the grand scheme of things, a 100-point decline in the Dow isn’t much to sneeze at given that a 1% decline would burn up 250 Dow points. A little sell-off like that might not look so pretty on its face, but isn’t much on a percentage basis.
A little sell-off wouldn’t be such a bad thing, even if it were more of the short-term 2-3% type. Of course, that would equate to 500-750 Dow points. Again, the optics might not be pleasant, but the fact is that this is life in a Dow 25,000 world. Meanwhile, the market is off to its best start to any year since 1964, which is probably before most investors were even born.
By the close today, the indexes all finished in the red, but near the peaks of their daily ranges. While this ended the NASDAQ Composite Index’s six-day winning streak, the action overall had the feeling and look of support of the intraday lows.
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